Lockheed Martin (LMT) raised its annual sales target following the unexpected resumption of deliveries of its F-35 aircraft after the Pentagon began accepting the jets last week. The resumption comes after a months-long pause due to delays in its software upgrade. Lockheed has been upgrading the jets under the Technology Refresh 3 (TR-3) program, which enhances the F-35 with better displays and processing power.
The delivery resumption includes an incomplete software upgrade, and the Pentagon will withhold some payment until the remaining enhancements are finished. Lockheed’s F-35 program is the world's largest defense program and contributes around 30% of the company's revenue. CEO Jim Taiclet stated that they anticipate deliveries for 2024 to meet the expected range of 75-110 F-35s.
Market Overview:- Lockheed Martin raised its annual sales target.
- Shares rose 2.3% in premarket trading.
- The U.S. resumed taking F-35 deliveries after a months-long pause.
- The Technology Refresh 3 (TR-3) program upgrades the F-35 jets.
- 2024 sales expected between $70.5 billion and $71.5 billion.
- The company benefited from a $95-billion additional funding approved by Congress.
- Anticipated deliveries of 75-110 F-35s in 2024.
- TR-3 enhancements are critical for maintaining F-35 as the most advanced fighter aircraft.
- Continued high demand for munitions due to conflicts in Ukraine and Israel.
Lockheed expects 2024 sales to be between $70.5 billion and $71.5 billion, versus the earlier forecast of $68.5 billion to $70 billion. The company also benefited from a $95-billion additional funding approved by Congress, which includes aid for Ukraine and Israel. Combat in Ukraine and Israel has consumed high volumes of munitions, including Lockheed-made Patriot air defense interceptors.
Lockheed's second-quarter net income of $6.85 per share beat estimates of $6.46 per share. Total quarterly sales rose 8.5% to $18.12 billion, also above the $17.04 billion estimated. The TR-3 involves both hardware and software improvements and is seen as a pillar of a wider upgrade to the stealth jet known as Block 4.
